BNP Paribas plan to invest €3 billion in digitization as consumers flock to digital.
France’s largest bank and global financial heavyweight BNP Paribas plan to invest €3 billion in digital technology over the next three years. The 2020 business development plan, released in conjunction with BNP Group’s 2016 performance report outlines a boost in spending on digital initiatives by 50 percent to €3 billion.
After showing a modest rise in last year’s revenues and mixed results in retail & investment banking, the increased investment is designed to help adapt to changing client behaviors, cut costs and reach a 6.5 percent annual growth in profits by 2020. BNP also hopes to generate €3.4 billion in cost savings over the same period.
BNP Paribas Chief Executive Jean-Laurent Bonnafé stated -“After the success of its 2014-2016 plan, which allowed to attain the defined targets, the Group now unveils its 2020 business development plan that announces an acceleration of digitization and targets an average growth of net income of more than 6.5% per year until 2020. Serving its customers all over the world, the Group is thus building the bank of the future.”
The €3 billion investment will be directed towards technology labs, incubators, and new digital apps and platforms that streamline internal processes and provide new customer experiences.
BNP’s massive investment comes at a time of dramatic change in the banking industry. Until the early 2000’s, customers did most of their banking through three main channels, namely, the traditional bank branch, ATM’s and phone banking. Today, with the advance of technology, there are significantly more devices available for customers to do their banking activities. The last few years has seen a significant shift from traditional in-person banking to online and increasingly mobile accessed services.
BNP Paribas is considered an industry leader in digital banking. Just after releasing its plans to invest €3 billion in digitization, the banking group also announced that it will be strengthening its relationship with the Plug and Play incubation initiative in Silicon Valley.